NasdaqGS:PAYX

Stock Analysis Report

Executive Summary

Paychex, Inc. provides integrated human capital management solutions for payroll, benefits, human resource (HR), retirement, and insurance services for small- to medium-sized businesses in the United States and Europe.

Snowflake

Fundamentals

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Paychex's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.0%

PAYX

1.6%

US IT

2.3%

US Market


1 Year Return

23.0%

PAYX

23.3%

US IT

5.6%

US Market

Return vs Industry: PAYX matched the US IT industry which returned 23.3% over the past year.

Return vs Market: PAYX exceeded the US Market which returned 5.6% over the past year.


Shareholder returns

PAYXIndustryMarket
7 Day2.0%1.6%2.3%
30 Day4.6%-0.08%-1.0%
90 Day-1.0%-2.6%-0.7%
1 Year26.9%23.0%24.6%23.3%7.9%5.6%
3 Year65.6%50.5%97.9%89.8%45.6%36.3%
5 Year122.8%89.6%155.5%132.0%65.8%47.6%

Price Volatility Vs. Market

How volatile is Paychex's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Paychex undervalued compared to its fair value and its price relative to the market?

28.85x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: PAYX ($84.75) is trading above our estimate of fair value ($62.05)

Significantly Undervalued: PAYX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: PAYX is good value based on its PE Ratio (28.8x) compared to the IT industry average (36.4x).

PE vs Market: PAYX is poor value based on its PE Ratio (28.8x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: PAYX is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: PAYX is overvalued based on its PB Ratio (12x) compared to the US IT industry average (4.3x).


Next Steps

Future Growth

How is Paychex forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

7.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAYX's forecast earnings growth (7.4% per year) is above the savings rate (2.7%).

Earnings vs Market: PAYX's earnings (7.4% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: PAYX's earnings are forecast to grow, but not significantly.

Revenue vs Market: PAYX's revenue (5.8% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: PAYX's revenue (5.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: PAYX's Return on Equity is forecast to be very high in 3 years time (41.8%).


Next Steps

Past Performance

How has Paychex performed over the past 5 years?

10.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: PAYX's earnings have grown by 10.5% per year over the past 5 years.

Accelerating Growth: PAYX's earnings growth over the past year (2.7%) is below its 5-year average (10.5% per year).

Earnings vs Industry: PAYX earnings growth over the past year (2.7%) underperformed the IT industry 8.4%.


Return on Equity

High ROE: PAYX's Return on Equity (41.9%) is considered outstanding.


Return on Assets

ROA vs Industry: PAYX has a higher Return on Assets than the IT industry average last year.


Return on Capital Employed

ROCE Improving: PAYX's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Paychex's financial position?


Financial Position Analysis

Short Term Liabilities: PAYX's short term assets ($5.6B) exceeds its short term liabilities ($4.8B)

Long Term Liabilities: PAYX's short term assets (5.6B) exceeds its long term liabilities (1.3B)


Debt to Equity History and Analysis

Debt Level: PAYX's debt to equity ratio (33.9%) is considered satisfactory

Reducing Debt: Insufficient data to determine if PAYX's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: PAYX's debt is well covered by operating cash flow (151.5%).

Interest Coverage: PAYX's interest payments on its debt are well covered by EBIT (113.3x coverage).


Balance Sheet

Inventory Level: PAYX has a low level of unsold assets or inventory.

Debt Coverage by Assets: PAYX's debt is covered by short term assets (assets are 6.513360x debt).


Next Steps

Dividend

What is Paychex's current dividend yield, its reliability and sustainability?

2.93%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%1.5%markettop25%3.8%industryaverage1.3%forecastin3Years2.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: PAYX's dividend (2.93%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: PAYX's dividend (2.93%) is low compared to the top 25% of dividend payers in the US market (3.76%).

Stable Dividend: PAYX's dividends per share have been stable in the past 10 years.

Growing Dividend: PAYX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (80.3%), PAYX's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PAYX's dividends in 3 years are forecast to be covered by earnings (74% payout ratio).


Next Steps

Management

What is the CEO of Paychex's salary, the management and board of directors tenure and is there insider trading?

8.1yrs

Average management tenure


CEO

Marty Mucci (59yo)

9.1yrs

Tenure

US$7,930,520

Compensation

Mr. Martin Mucci has been the Chief Executive Officer and President of Paychex, Inc. since September 30, 2010. Mr. Mucci served as the Senior Vice President of Operations at Paychex Inc., since October 200 ...


CEO Compensation Analysis

Compensation vs. Market: Marty's total compensation ($USD7.93M) is about average for companies of similar size in the US market ($USD11.23M).

Compensation vs Earnings: Marty's compensation has been consistent with company performance over the past year.


Management Age and Tenure

8.1yrs

Average Tenure

59yo

Average Age

Experienced Management: PAYX's management team is seasoned and experienced (8.1 years average tenure).


Board Age and Tenure

9.0yrs

Average Tenure

63yo

Average Age

Experienced Board: PAYX's board of directors are considered experienced (9 years average tenure).


Insider Trading

Insider Buying: PAYX insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$63,00105 Aug 19
Robert Schrader
EntityIndividual
Shares751
Max PriceUS$83.93
SellUS$15,34415 Jul 19
Laurie Zaucha
EntityIndividual
Shares179
Max PriceUS$85.72
SellUS$22,11615 Jul 19
Stephanie Schaeffer
EntityIndividual
Role
Chief Legal Officer
VP, Chief Legal Officer & Corporate Secretary
Shares258
Max PriceUS$85.72
SellUS$40,80315 Jul 19
Efrain Rivera
EntityIndividual
Role
Treasurer
Senior VP
Shares476
Max PriceUS$85.72
SellUS$229,90115 Jul 19
Martin Mucci
EntityIndividual
Role
Chief Executive Officer
President
Shares2,682
Max PriceUS$85.72
SellUS$44,14615 Jul 19
Michael Gioja
EntityIndividual
Role
Senior Key Executive
Senior VP of Product Development & Information Technology
Shares515
Max PriceUS$85.72
SellUS$30,68815 Jul 19
John Gibson
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Service
Shares358
Max PriceUS$85.72
SellUS$25,20215 Jul 19
Mark Bottini
EntityIndividual
Role
Head of Sales
Senior Vice President of Sales
Shares294
Max PriceUS$85.72
SellUS$12,88512 Jul 19
Laurie Zaucha
EntityIndividual
Shares151
Max PriceUS$85.33
SellUS$18,51712 Jul 19
Stephanie Schaeffer
EntityIndividual
Role
Chief Legal Officer
VP, Chief Legal Officer & Corporate Secretary
Shares217
Max PriceUS$85.33
SellUS$209,57012 Jul 19
Martin Mucci
EntityIndividual
Role
Chief Executive Officer
President
Shares2,456
Max PriceUS$85.33
SellUS$37,03312 Jul 19
Michael Gioja
EntityIndividual
Role
Senior Key Executive
Senior VP of Product Development & Information Technology
Shares434
Max PriceUS$85.33
SellUS$25,68412 Jul 19
John Gibson
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Service
Shares301
Max PriceUS$85.33
SellUS$21,16212 Jul 19
Mark Bottini
EntityIndividual
Role
Head of Sales
Senior Vice President of Sales
Shares248
Max PriceUS$85.33
SellUS$115,93609 Jul 19
Laurie Zaucha
EntityIndividual
Shares1,359
Max PriceUS$85.31
SellUS$196,55409 Jul 19
Jennifer Vossler
EntityIndividual
Shares2,304
Max PriceUS$85.31
SellUS$152,79009 Jul 19
Stephanie Schaeffer
EntityIndividual
Role
Chief Legal Officer
VP, Chief Legal Officer & Corporate Secretary
Shares1,791
Max PriceUS$85.31
SellUS$799,60909 Jul 19
Efrain Rivera
EntityIndividual
Role
Treasurer
Senior VP
Shares9,405
Max PriceUS$85.31
SellUS$1,685,64009 Jul 19
Martin Mucci
EntityIndividual
Role
Chief Executive Officer
President
Shares19,759
Max PriceUS$85.31
SellUS$334,07409 Jul 19
Michael Gioja
EntityIndividual
Role
Senior Key Executive
Senior VP of Product Development & Information Technology
Shares3,916
Max PriceUS$85.31
SellUS$231,70209 Jul 19
John Gibson
EntityIndividual
Role
Senior Key Executive
Senior Vice President of Service
Shares2,716
Max PriceUS$85.31
SellUS$201,84309 Jul 19
Mark Bottini
EntityIndividual
Role
Head of Sales
Senior Vice President of Sales
Shares2,366
Max PriceUS$85.31
BuyUS$129,90026 Oct 18
Joseph Doody
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$65.50
BuyUS$66,50024 Oct 18
Joseph Doody
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$66.50

Ownership Breakdown


Management Team

  • B. Golisano (77yo)

    Founder & Chairman

    • Tenure: 15yrs
    • Compensation: US$326.25k
  • Marty Mucci (59yo)

    President

    • Tenure: 9.1yrs
    • Compensation: US$7.93m
  • Efrain Rivera (62yo)

    Senior VP

    • Tenure: 8.3yrs
    • Compensation: US$2.40m
  • John Gibson (52yo)

    Senior Vice President of Service

    • Tenure: 6.4yrs
    • Compensation: US$1.98m
  • Mike Gioja (61yo)

    Senior VP of Product Development & Information Technology

    • Tenure: 8.3yrs
    • Compensation: US$2.03m
  • Mark Bottini (58yo)

    Senior Vice President of Sales

    • Tenure: 8yrs
    • Compensation: US$1.96m
  • Stephanie Schaeffer (49yo)

    VP, Chief Legal Officer & Corporate Secretary

    • Tenure: 13.8yrs
  • Frank Fiorille

    VP of Risk

    • Tenure: 2.8yrs
  • Terri Allen

    Investor Relations

    • Tenure: 0yrs
  • Chris DeSalvo

    VP of Service Excellence & Operations

    • Tenure: 0.6yrs

Board Members

  • Joe Tucci (72yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$269.79k
  • Joe Doody (67yo)

    Independent Director

    • Tenure: 9yrs
    • Compensation: US$255.54k
  • Pam Joseph (60yo)

    Independent Director

    • Tenure: 1.5yrs
    • Compensation: US$289.76k
  • B. Golisano (77yo)

    Founder & Chairman

    • Tenure: 15yrs
    • Compensation: US$326.25k
  • David Flaschen (63yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$290.04k
  • Marty Mucci (59yo)

    President

    • Tenure: 9.1yrs
    • Compensation: US$7.93m
  • Joe Velli (61yo)

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: US$266.54k
  • Tom Bonadio (70yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$255.54k
  • Kara Wilson (49yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$255.54k

Company Information

Paychex, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Paychex, Inc.
  • Ticker: PAYX
  • Exchange: NasdaqGS
  • Founded: 1979
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$30.336b
  • Shares outstanding: 357.94m
  • Website: https://www.paychex.com

Number of Employees


Location

  • Paychex, Inc.
  • 911 Panorama Trail South
  • Rochester
  • New York
  • 14625
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PAYXNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 1983
PCXDB (Deutsche Boerse AG)YesCommon StockDEEURAug 1983
PAYXWBAG (Wiener Boerse AG)YesCommon StockATEURAug 1983

Biography

Paychex, Inc. provides integrated human capital management solutions for payroll, benefits, human resource (HR), retirement, and insurance services for small- to medium-sized businesses in the United State ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 23:39
End of Day Share Price2019/10/16 00:00
Earnings2019/08/31
Annual Earnings2019/05/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.